GST Update Vol 59 10th August 2018
A. CHANGES IN THE GST REGIME
Deferred reverse charge mechanism (RCM) on supply of goods or services by unregistered person
The provision on liability to pay GST in case of supplies received by a registered
person from unregistered suppliers is based on RCM. This provision was deferred till 30th June,
2018. The CBIC had vide notification no. 12/2018 – central tax rate deferred the provision of RCM
in case of supplies received by a registered person from unregistered suppliers by three months
i.e. from 30th June, 2018 to 30th September, 2018. The CBIC has now vide notification no. 22/2018
– central tax (rate) dated 6th August, 2018 on recommendation of the GST Council deferred the
provision up to 30th September, 2019.
Registration of taxpayers who did not complete migration process
The CBIC vide notification no. 31/2018 – central tax dated 6th August, 2018 specifies
special registration procedure to apply for GSTIN for the persons who did not file the complete
FORM GST REG-26 of the CGST Rules, 2017 but received only a Provisional Identification Number (PID)
till the 31st December, 2017. In the first step, the details as provided in the notification must
be furnished by such taxpayers to the jurisdictional nodal officer of the central government or
state government on or before the 31st August, 2018. The taxpayers should then follow the procedure
prescribed in the notification. On completing the registration procedure, such taxpayers will be
deemed to be registered from 1st July, 2017.
B. PROPOSED CHANGES AND INDUSTRY ISSUES
International Monetary Fund (IMF) suggestions on the GST rate structure of India
As per the media reports, IMF in its country report has recommended that India should consider a
dual rate GST structure with a low standard rate and an additional higher rate on select items.
This structure can be progressive and preserve revenue neutrality and streamlining exemptions
could contribute to progressivity and reduce compliance and administrative costs. It added
that the present multiple rate structure and other features gives
rise to high compliance and administrative costs.
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